Dentists rarely like to talk in public about occupational fraud involving fellow dentists. Such discussion seems to make most dentists uncomfortable. One reason may be the inhibitory effect of collegiality.

We all recognise the cultural biases (for example bonds of loyalty and friendship) that accompany membership of a profession and the difficulty in achieving absolute detachment from these perfectly legitimate bonds. Another is the fact that fraud is not a pleasant business. Fraud control can be a difficult field.

As Sparrow1 says of his own wide experience: “Fraud control is a miserable business. Failure to detect fraud is bad news; and finding fraud is bad news, too. Senior managers seldom want to hear any news about fraud, because news about fraud is never good. Institutional denial of the scope and seriousness of fraud losses is the norm. Fraud control policies tend to be scandal driven.”

Fraud control is a miserable business. Failure to detect fraud is bad news; and finding fraud is bad news, too

Malcolm Sparrow

A third reason may be that dentists do not feel they are equipped with the necessary tools – semantic and legalistic – to contribute in a meaningful way in the discourse. After all, occupational fraud studies are rarely taught at undergraduate level and are difficult to find in CPD lectures.

The purpose of this article is to describe the main issues in the field of provider fraud in dentistry. The focus is on fraud carried out by dentists in the course of their professional activities. The term Dental Provider Fraud (DPF) will be used and is defined as: “Fraud committed by a dentist when he or she submits, or causes someone else to submit, false or misleading information for use in determining the amount of fees or benefits payable, that could result in some unauthorised benefit to the dentist, or to another person or entity.”

The dentist may bill the patient directly, may be paid by a publicly funded delivery system or may be paid via a private insurance carrier.

Fraud

Developing a definition of fraud is the first step in considering the problem. Vasiu, Warren and Mackay touch on one of the difficulties in defining fraud: “Fraud is a concept that seems to have a perfectly obvious meaning until we try to define it. Fraud is a deep concept, and few use common definitions.”2

In its broadest terms, “fraud means obtaining something of value or avoiding an obligation by means of deception”3. Black’s Law Dictionary defines fraud as “theft by the intentional use of deceit or trickery”4. Two other terms, “corruption” and “abuse”, require definition. Corruption and fraud are often linked together, partly because in both cases the recipient is seeking to obtain some covert financial advantage5.

Corruption is “the abuse of entrusted power for private gain”6. Healthcare abuse is produced when either the provider practices are inconsistent with sound fiscal, business or medical practices, and result in an unnecessary cost or in reimbursement of services that are not medically necessary or that fail to meet professionally recognised standards for healthcare.

Legislation

In the UK, an Act to make provision for, and in connection with, criminal liability for fraud and obtaining services dishonestly (2006 c.35) came into effect in January 2007. Its territorial extent is England, Wales and Northern Ireland.

In the Republic of Ireland, the Criminal Justice (Theft And Fraud Offences) Act 2001 is the legislation covering DPF.

Deception

According to Guerrero, Anderson and Afifi7 the five primary forms of deception are as follows:

Lying: making up information or giving information that is false, the opposite or very different from the truth.

Equivocation: making an indirect, ambiguous, vague or contradictory statement.

Concealment: omitting information that is important or relevant to the given context, or engaging in behaviour that helps hide relevant information.

Exaggeration: overstatement, embellishment or stretching the truth to a degree.

Understatement: minimisation or downplaying aspects of the truth.

The presence of intent differentiates between deception and an honest mistake. For example, ticking the wrong box or honest misinterpretation of a rule.

Mens rea

Mens rea, “the state of mind required to be criminally liable”8, is one of the necessary elements defining a crime such as DPF. The standard common law test of criminal liability is usually expressed in the phrase “actus non facit reum nisi mens sit rea”, which means “the act does not make a person guilty unless the mind be also guilty”.

Thus, the general rule is that there must be an actus reus accompanied by some level of mens rea to constitute the crime with which the defendant is charged. Mens rea refers to the mental element of the offence that accompanies the actus reus. Under the traditional common law, the guilt or innocence of a person relied upon whether they had committed the crime, actus reus, and whether they intended to commit the crime, mens rea.

Types of DPF

Twelve broad categories of dental provider fraud have been identified. Rocke9 provides a good working typology of the different types of dental practitioner fraud of interest.

Typology of the different types of DPF

Nonrendered service

This is the easiest type of fraud to identify, investigate and pursue. It encompasses situations in which a dentist bills for services that were never rendered or for supplies that were never received by the patient (for example: charging for a radiograph when none was taken).

Upcoding

This involves situations in which some legitimate service has been rendered; however, the appropriate Current Procedural Terminology (CPT) code is not indicated on the submitted claim form. Instead, another CPT code is used that does not accurately describe the service rendered and results in enhanced compensation to the dentist. An example would be charging for the surgical removal of a tooth when, in fact, the tooth was extracted in a conventional manner.

Unbundling

In cases of unbundling, the dentist chooses not to submit claims for reimbursement using a global or general CPT code that fairly and accurately describes the services rendered, but instead breaks down the various components that make up the global fee into individual parts, thereby increasing the reimbursement received.

Mischaracterisation

This occurs when dental services that would not ordinarily be covered are falsely described with the intention of obtaining coverage. An example of this is describing a root treatment in a premolar tooth (which may not be covered) as having been carried out on the adjacent canine tooth (which may be covered). Another example might be claiming for a domiciliary visit when the treatment took place in the dentist’s surgery.

Unnecessary dental services

Almost all claim forms contain both the explicit and implicit representation that all services rendered by a dentist were deemed to be medically necessary and for the benefit of the patient. Any services that were rendered and known not to be medically necessary could thus result in a false claim. An example of unnecessary dental services is billing for radiographs that are of no diagnostic value.

Routine waiver of co-payments

Co-payments are designed to reduce the growth in healthcare spending by making consumers bear some of the cost of the care so that they have an economic interest in the services rendered. In addition, co-payments give patients an immediate interest in avoiding fraudulent and abusive situations (due in part because they will not want to pay for services that are not needed).

Although co-payments may be waived occasionally because of dire financial circumstances, any routine waiver of co-payments can be characterised as creating false claims, since a routine waiver may mean that the provider is misrepresenting his or her customary and ordinary fees.

Informal payments

Also termed “under the table payments” or “brown envelope payments”. Patients are charged and pay unofficial fees to gain access to health services that are supposed to be free of charge at the point of use.

Quackery and sham cures

Formally defined as “the fraudulent misrepresentation of one’s ability and experience in the diagnosis and treatment of disease or of the effects to be achieved by the treatment offered”10. The terms imply over promotion of false or unproven health claims in dentistry for profit, including questionable ideas, products and services.

Misuse of modernisation-type funds

Funds provided for a specific purpose wrongly diverted to another use.

Double-billing

Practitioner submits claim(s) to more than one payment agency for the same item of service.

Kickbacks

An inducement to encourage the use of services paid for by the delivery system.

Altering dates of service

The correct date on which a procedure is performed must be used. It is fraudulent to knowingly send a claim for a treatment using a date other than the actual date of service in order to receive payment not otherwise entitled to. (Adapted from Rocke, 2000)

Why fight DPF?

Five reasons are advanced why DPF should be counteracted. These are that DPF represents:

A malum in se

Harm to individual patients.

Harm to society in general

Harm to the profession of dentistry

Harm to the transgressing dentist.

The Latin phrase malum in se, widely used by jurists, means wrong in itself. It refers to conduct assessed as inherently wrong by nature, independent of regulations governing the conduct.

Extent of DPF

Different methodologies have been used to estimate the level of provider fraud in dentistry11. Estimating levels of DPF is a difficult exercise. One difficulty is that this type of crime is not self-revealing.

Another major problem with estimates is that terms such as “abuse”, “waste” and “inappropriate” are lumped in with fraud. Therefore, caution should be used in interpreting these estimates.

Feldman states: “The conventional wisdom is that as much as 10 per cent of this [the healthcare budget] is lost to fraud, waste, and abuse.”12

As regards a publicly funded delivery system, Oral Care Consulting states that, in the Dental Treatment Services Scheme operating in Republic of Ireland, “at least 10 per cent of payments are likely to be inappropriate”13. Depending which country is surveyed, estimates of losses to healthcare provider fraud range from 1 per cent to 15 per cent. It is likely that DPF lies within this range.

I want to emphasise that I believe most dentists are professional, caring, ethical and honest. Most do not perpetrate any type of dental fraud, abuse or scam. There is strong evidence to support this view, for example from Lynch14 and Schanschieff15.

The profession of dentistry has worked long and hard to achieve its high status. However, it is clear that some dentists do perpetrate DPF, as can be seen from the number of cases described in the media. It is also clear that it is a serious problem for all stakeholders.

Why do dentists engage in DPF?

Three factors are hypothesised by Ramos16, to influence whether an individual engages in fraud. These are rationalisation, opportunity and pressure. This hypothesis is described graphically in the well-known Fraud Triangle in Figure 1 (above).

Duffield and Grabosky17 discuss what they term the “psychological factors in fraud”.

They state that at first glance: “A psychological explanation for fraud would appear simple – greed and dishonesty. Such an explanation is, however, overly simplistic. There are many in society who are aggressively acquisitive, but generally law abiding. Moreover, they are also associated with entirely legitimate forms of human endeavour. Technologies of prediction remain imperfect. Not all dishonest people commit fraud. To date, behavioural scientists have been unable to identify a psychological characteristic that serves as a valid and reliable marker of the propensity of an individual to commit fraud.”

When discussing motivation, Stotland18 points out that: “…sometimes individuals’ motivation for crime may have originally been relative deprivation, greed, threat to continued goal attainment and so forth. However, as they found themselves successful at this crime, they began to gain some secondary delight in the knowledge that they are fooling the world, that they are showing their superiority to others.”

There is also the gratification obtained from the mastery of a situation. He terms this motivation “ego challenge”.

In 1940, Edwin Sutherland19 coined the phrase “white-collar crime”. Sutherland’s concept of white-collar crime had a ground-breaking polemical impact. Sutherland discredited widely held theories of his day that attributed criminal behaviours to poverty and its associated pathologies.

Sutherland described the white-collar criminal as one who is “respected”, “socially accepted and approved” and “looked up to”.

He later refined his definition of white-collar crime to “crime committed by a person of respectability and high social status in the course of his occupation”20. Fraud committed by dentists in the course of their profession is a perfect example of white-collar crime.

As well as positive motivations for white-collar crimes such as fraud, there are also “weak restraints” that lessen the inhibitions to commit these crimes. In most types of fraud, a majority of offenders may seek to justify or rationalise their activity as hypothesised in the fraud triangle.

In doing so, they will use vocabularies of extenuation21 that manufacture rationale and extenuating circumstances and remove the perception of criminality from the act. For example, frauds against large organisations i.e. insurance companies are often rationalised with the excuse “they can well afford it”.

Another example of neutralisation might include viewing the oral healthcare delivery system as culpable in some respect by not paying an adequate professional fee. Still another is the perception that everyone engages in DPF as part of astute professional practice. In this way, those individual dentists who do not participate are seen as naïve.

Stotland states that white-collar criminals appear to be motivated by money, avoidance of threats to goal attainment, sense of superiority, mastery, the admiration of others and conformity pressures. Psychological restraints on their criminal behaviour are weakened by their jungle view of society, the perception of the moral ambiguity of white-collar crime, the lightness of punishment, the view of victims as being morally culpable, and a belief in their own beneficence.

Stotland concludes that fraud is more likely when remuneration is made from a distant anonymous payment agency rather than from an individual patient.

Countering DPF

Professional fraud in medicine has received considerable attention in the literature, for example Whiting22, Feldman23, and Faunce, Urbas and Skillen24. There was an awareness of the existence of this type of crime by medical practitioners, including dentists, before Sutherland.

A body of literature, perhaps not overly extensive, exists on professional fraud carried out specifically by dentists, for example Pontell, Jesilow and Geis25, Schanschieff, Shovelton, and Toulmin26, Bloomfield27, Welie, 2004b28 and Steele29. A typology of this type of crime was produced by Rocke30.

A conceptual model, developed from the literature, suggests the presence of eight distinct thematic dimensions in countering fraud. These are presented in Figure 2.

Using this model as a framework, we make eight suggestions that may help to counter DPF.

As part of developing a counter-fraud culture, and to emphasise the criminality involved, we should use the term fraud rather than the softer euphemisms such as scamming, milking the system or playing the system.

As a deterrent, a robust system of pre-enrolment verification, ensuring that the dentist is familiar with the rules and regulations and the terms and conditions of the delivery system, should be in operation.

To prevent fraud, a proportion of payments to dentists should be manually checked before payment in an automatic payment system.

As an aid to detection, patients should be randomly selected for a clinical peer review examination.

As part of the investigation process, failure of the dentist to produce a patient record on request should be routinely followed through.

Sanction: all possible sanctions – regulatory, civil and criminal – should be considered in cases of DPF.

Redress: the delivery system should have a clear written policy on the recovery of losses incurred to DPF.

Monitoring the counter fraud system: the delivery system should regularly review the effectiveness of its counter fraud work against agreed performance indicators.

About the author

Liam Lynch BDS MDPH PhD is a dentist practising in Cork City, Ireland. He has more than 32 years’ experience of active involvement in publicly funded dentistry. He lectures on the topic of healthcare fraud to MSc students in Healthcare Law and Ethics at the Royal College of Surgeons of Ireland in Dublin. He has published and lectured internationally on probity assurance systems in oral healthcare.

In 2013, he was awarded a PhD from The National University of Ireland for his thesis The Counter Practitioner Fraud in Publicly Funded Dentistry Index – A New Dental Instrument.

His new book, Occupational Fraud in Publicly Funded Dentistry – The Elephant in the Room, addresses the main issues in countering this type of fraud. The book was launched at the European Healthcare Fraud and Corruption Network conference in Athens, in November 2014.

22. Whiting AD. The Professional Organizations, Training and Ethical Codes of Physicians, Dentists, Nurses and Pharmacists. Annals of the American Academy of Political and Social Science, 1922; 101: 51-67.

23. Feldman R. An Economic Explanation for Fraud and Abuse in Public Medical Care Programs. The Journal of Legal Studies 2001; 30(2): 569-577.